Wednesday 23 October 2019

Irish Takeover Panel to get sole oversight of UK-listed Irish firms

The change will mean the Irish Takeover Panel becomes the sole authority overseeing regulation of takeover moves in relation to companies including DCC, Grafton Group, Greencore Group and UDG Healthcare, despite all four having their market listings on the London Stock Exchange. Photo: PA
The change will mean the Irish Takeover Panel becomes the sole authority overseeing regulation of takeover moves in relation to companies including DCC, Grafton Group, Greencore Group and UDG Healthcare, despite all four having their market listings on the London Stock Exchange. Photo: PA
Donal O'Donovan

Donal O'Donovan

The Irish Takeover Panel will take full responsibility for overseeing bids for Irish firms listed in London if there's a hard Brexit, in the latest evidence of how long-integrated financial systems are being sundered by the UK vote to leave the EU.

The change will mean the Irish Takeover Panel becomes the sole authority overseeing regulation of takeover moves in relation to companies including DCC, Grafton Group, Greencore Group and UDG Healthcare, despite all four having their market listings on the London Stock Exchange.

Under European Union rules on takeover bids, when a company's securities are not listed on a regulated market in its home member state, jurisdiction in respect of takeovers is shared by the home state and country where the shares are listed.

In a statement, the Irish Takeover Panel said that if the UK leaves the European Union on March 29 without a deal, or an agreement in place providing for a transition period, it will have sole jurisdiction in respect of a takeover bids for the Irish companies, ending a long standing practice where jurisdiction has been shared.

However, the Irish panel will not have jurisdiction to supervise any takeover bid for a fifth company - Carador Income Fund - because a 1997 Act governing the issues does not provide the Irish regulator with jurisdiction over closed-end funds.

Meanwhile, Bank of Ireland's UK arm is one of 19 British banks Fitch Ratings has said may have their long-term issuer default ratings (IDR) lowered as a result of the heightened uncertainty over Brexit.

The list of 19 banks placed on ratings watch negative includes heavyweights Barclays, HSBC and RBS, as well as mid-tier and smaller lenders.

Fitch said the move reflects the increased risk that a disruptive no-deal Brexit, where the UK leaves the EU without a withdrawal agreement in place, either in March or at the end of a short extension, could result in negative action on the UK banks.

The explicit link of the move to the Brexit negotiations means Fitch expects to resolve the issue one way or another during the second quarter of the year.

"Fitch believes that a no-deal Brexit would lead to substantial disruption to UK economic and trade prospects, at least in the near-term.

"The impact of a no-deal Brexit on economic growth is highly uncertain, but a recession on the scale of that seen in the UK in the early 1990s, when real GDP declined by 2pc over six quarters, would be a reasonable comparison for gauging the potential macroeconomic stress."

Data yesterday showed a slowdown in the UK construction sector, in part as a result of shortages of materials due to stockpiling ahead of March 29.

Irish Independent

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